The Cape Town Convention on International Interests in Mobile Equipment, or Cape Town Treaty is an international treaty intended to standardize transactions involving movable property. The treaty creates international standards for registration of contracts of sale (including dedicated registration agencies), security interests (liens), leases and conditional sales contracts, and various legal remedies for default in financing agreements, including repossession and the effect of particular states' bankruptcy laws.

Three protocols to the convention are specific to three types of movable equipment: Aircraft Equipment (aircraft and aircraft engines; signed in 2001), railway equipment (signed in 2007) and space assets (signed in 2012).

The treaty resulted from a diplomatic conference held in Cape Town, South Africa in 2001. The conference was attended by 68 countries and 14 international organizations. 53 countries signed the resolution proposing the treaty .[1] The treaty came into force on 1 April 2004 ,[2] and has been ratified by 57 parties. The Aircraft Protocol (which applies specifically to aircraft and aircraft engines ) took effect on 1 March 2006 when it was ratified by 8 countries: Ethiopia, Ireland, Malaysia, Nigeria, Oman, Panama, Pakistan, and the United States.

Contents

As of July 2015, the convention has been ratified by 64 states as well as the European Union. The railway and the space protocol have been ratified by respectively one country only (Luxembourg) and no countries and thus have not taken effect. An overview of the status of the treaty and protocols is shown below:

Instrument

Signature

Location

Entry into force

Signatures

Ratifications
(required for entry into force)

Convention

000000002001-11-16-000016 November 2001

Cape Town

000000002006-03-01-00001 March 2006

28

69 (3)

Aircraft Protocol

000000002001-11-16-000016 November 2001

Cape Town

000000002006-03-01-00001 March 2006

23

60 (8)

Railway Rolling Stock Protocol

000000002007-02-23-000023 February 2007

Luxembourg

-

6

2 (4)

Space Assets Protocol

000000002012-03-09-00009 March 2012

Berlin

-

4

0 (10)

In the United States, the treaty was approved by the U.S. Senate in 2003, and implemented by the full Congress in the Cape Town Treaty Implementation Act of 2004.

The European Union joined the convention and the Aircraft Protocol as a Regional Economic Integration Organization. On the subject of the convention, both the Member states of the European Union and the Union itself have competence: e.g. while the substantive law regarding insolvency is regulated by the states, the conflict of law-rules (which county has jurisdiction etc.) is regulated by the European Union. According to the Government of the Netherlands the acceptance of the European Union in a member state which itself is not a party to the convention has no practical consequences.[3] The European union accepted the Railway protocol in December 2014.

The aircraft Protocol (officially: Protocol to the Convention on International Interests in Mobile Equipment on matters specific to aircraft equipment) was signed immediately with the treaty and the only protocol currently entered into force. It applies to aircraft which can carry at least eight people or 2750 kilograms of cargo, aircraft engines with thrust exceeding 1,750 pounds-force (7,800 N) or 550 horsepower (410 kW), and helicopters carrying 5 or more passengers. The International Registry of Mobile Assets established to record international property interests in the aircraft equipment covered by the treaty is located in Ireland. Mediation cases for leasing disputes are to be heard in the High Court of Ireland.[4] As of December 2014, the protocol has 59 contracting states.

The Railway Rolling Stock Protocol, or Luxembourg Railway Protocol, officially the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Railway Rolling Stock was adopted on 23 February 2007 and applies to railway rolling stock (broadly defined as “vehicles movable on a fixed railway track or directly on, above or below a guideway”. The protocol establishes a registry located in Luxembourg and requires 4 countries for entry into force. Currently the protocol has been signed by Gabon, Germany, Italy, Luxembourg, Switzerland as well as the European Union, while it has been ratified by the European Union and 1 state: Luxembourg.

The Space Assets protocol, or Berlin Space Protocol[5] (officially Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Space Assets) was concluded on 9 March 2012 and requires 10 ratifications before entry into force (in the original protocol this number was 4).[6] The protocol applies to objects functioning in space like satellites or satellite parts.[7] The convention was strongly opposed by the satellite industry, claiming that it would lead to increased bureaucracy and "make the financing of new satellite projects more difficult and expensive".[8]